European Commission probing into Hungary aid granted to Audi

The European Commission commenced an investigation into whether the state aid provided by Hungary to German luxury carmaker Audi complied with European Union rules. Hungary granted Audi EUR133.3 million of state aid for an expansion of its Gyor site located in its western side. The EUR1.2-billion project is expected to create 2,100 jobs.

In a statement, the Commission said it had concerns on whether the state aid could harm competition. The Commission said in a statement that given the size of the project and the market share of the Volkswagen Group, it needs to verify the impact of the project on regional development.

The Commission said that it would look into whether the state aid is necessary to carry out the investment in Gyor. The Commission said it had allowed EUR43.67 million in German aid to Porsche to help the carmaker expand its Leipzig site in Saxony where it plans to build the Macan compact SUV.

The EUR522-million project is expected to secure 900 existing jobs at the site while creating over 1,000 new ones. According to the Commission, its assessment determined that the German aid was needed for the project to commence in Leipzig.

The Commission also trimmed state aid granted to BMW for producing the i3 and i8 vehicles at its Leipzig site – from EUR45 million to EUR17 million. The Commission said it had determined that only part of the planned aid was needed for BMW to bring on the project. [source: BBJ.hu]